Nov 26 2012
“While Social Security trustees can correctly say that the money they loaned to the Treasury is theirs to draw upon, the Treasury—already in debt and without reserves—cannot deny that it is right now borrowing money from the United States and the world to pay that obligation.”
WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, issued the following statement today about inaccurate remarks made recently by Assistant Senate Majority Leader Dick Durbin (D-IL) concerning the fiscal impact of Social Security:
“Getting the United States off our dangerous debt course will require an honest and forthright assessment of the facts. That’s why I was troubled to see Sen. Durbin say yesterday that ‘Social Security does not add one penny to our debt—not a penny.’ This has been a repeated theme of Majority Leader Reid also. But it is not an accurate picture of the situation. In fact, the Social Security trust fund has been cash flow negative for the past two years—meaning that the U.S. Treasury has had to borrow $27 billion to support the program since then.
Specifically, prior to two years ago, Social Security had run a surplus for decades. That surplus was borrowed by the U.S. Treasury and spent. But, beginning in 2010, payroll tax revenue has not been sufficient to send Social Security checks to retirees each month. Thus, the U.S. Treasury, which pays interest to Social Security on the money it has borrowed, has had to borrow money from the public so it can pay the trust fund what it owes. There is an undeniable shortfall in revenue to meet Social Security’s obligations. While Social Security trustees can correctly say that the money they loaned to the Treasury is theirs to draw upon, the Treasury—already in debt and without reserves—cannot deny that it is right now borrowing money from the United States and the world to pay that obligation. Treasury has added $27 billion to the public debt of the United States over the past two years to pay benefits, and the amount of public debt projected to be added due to the Social Security shortfall is just beginning to surge. The Congressional Budget Office is unequivocal on this point.
Public debt is considered more serious than internal debt, which is incurred among various government entities. But even internal debt is very serious because, as the Social Security situation shows, it will eventually have to be repaid.”